Independent coffeehouses are growing!

Independent coffee shops spreading in Las Vegas Valley

By CAITLIN MCGARRY, LAS VEGAS REVIEW-JOURNAL

March 4, 2012

Tucked behind a nondescript door in the back of a Boulder City industrial center 20 miles from Las Vegas, there’s a whole wide world of beans — sacks of imported, green coffee beans piled to the ceiling.

Next door is the roastery, where a shiny black Diedrich roasting machine is caramelizing the beans, some from Ethiopia, others from Guatemala. The rich aroma of roasted beans competes with warm blueberry notes of the morning’s drip coffee and the chocolaty scent of espresso. 

It’s a sunny Monday — roasting day at Colorado River Coffee Roasters.

Erik Anderson funnels the beans into the Diedrich, monitoring the exact temperature inside on a laptop computer. Roasting is an art and a science — some of the beans are roasted at a low temperature, some high, some low and then high, all in the quest to achieve just the right flavor. There’s no second chance if something goes wrong.

Anderson is part of a rare breed in Southern Nevada. His father, Colorado River owner Don Anderson, is one of a handful of coffee roasters in Southern Nevada, and the only one in metropolitan Las Vegas who roasts for widespread commercial distribution. Colorado River’s beans are grounds for lattes and cappuccinos from Strip eateries like Carnevino to independent coffeehouses like The Beat and SambalatteThe roastery now serves up about a ton of beans each month, but with the number of independent coffee shops increasing in the Las Vegas Valley, Anderson hopes for a 50 percent increase in production by the end of summer, which will add six days to the company’s roasting schedule.

CULTURE IN A CUP

Las Vegas is world-famous for late-night dining, early-morning drinking and 24-hour partying, but the city that never sleeps isn’t even ranked on lists of America’s most caffeinated cities.

According to a July report from market research firm NPD Group, Seattle tops the list of coffee-drinking cities. Denver; Austin, Texas; Anchorage, Alaska; and Portland, Ore., are in the top 12. Vegas is nowhere to be found — yet.

The presence of a local coffee roaster is a step forward for Las Vegas’ coffee culture, said John Ynigues, owner of Grouchy John’s coffee shop. Java-centric cities like San Francisco and Seattle have far more independent coffeehouses and an abundance of roasters to supply them. Many shop owners also roast their own beans. That hasn’t yet happened in Las Vegas.

“It’s the next logical step, I think,” Ynigues said. “In order to be diverse enough to grow that culture, we have to have that type of thing (roasters), also, not just small independents using the same bean.”

Ynigues uses Colorado River Coffee Roasters on his mobile coffee truck, and also plans to use the Boulder City beans at the Henderson coffee shop he’s opening in March. Roasting his own beans is a “pie in the sky” idea because of the cost, he said, but if the local coffee business reaches critical mass, it could happen sooner rather than later.

“Coffee has traditionally gone through a cycle of expansion and consolidation. The time is appropriate for an expansionary cycle now,” said Ric Rhinehart, executive director of the Specialty Coffee Association of America. “What’s really held it back over the last couple years is the lack of access to capital. Banks were not lending very well and people’s traditional sources of capital, home equity and retirement accounts, were not as liquid or available as they once were.”

Las Vegas’ independent coffee shop culture is growing, helped along by the presence of a local coffee roaster supplying specialty-grade beans; the depressed commercial real estate market; downtown redevelopment, which lends itself to and derives inspiration from creative public gathering places such as coffee shops; and the Internet, which provides information and resources on coffee that were previously unavailable or hard to find.

INDUSTRY BRUISED AS HARD TIMES BREW

It wasn’t so long ago that Las Vegas’ independent coffee scene, which brewed hot in the mid-1990s, had all but gone cold. Starbucks ruled the market, and smaller chains like The Coffee Bean & Tea Leaf and It’s A Grind filled in the corners the Seattle coffee behemoth left behind.

Five years ago, local fan favorites like Cafe Copioh and Cafe Espresso Roma near the University of Nevada, Las Vegas and downtown’s Enigma Cafe were closed for various reasons.

The Beat co-owner Jennifer Cornthwaite said when looking at coffeehouses from a financial perspective, closures often “didn’t have anything to do with how much money the business was making or how much people liked it. It was just they signed a bad lease.”

Las Vegas’ car culture lent itself to drive-thru java joints, and the price of commercial real estate was sky-high, preventing entrepreneurs from dipping their toes in the coffee business.

Then the recession hit. Starbucks shuttered 17 stores. The cost of commercial retail leases dropped like a brick, from $2.08 in the fourth quarter of 2008 to $1.38 at the end of 2011, Colliers International research director John Stater said.

Coffee aficionados began to start their own businesses, hoping Las Vegas residents would coalesce around locally owned neighborhood shops.

Sunrise Coffee owner Juanny Romero opened her Henderson shop in 2008, at the height of the recession. Others followed. Sambalatte Torrefazione owner Luiz Oliveira was unemployed when he launched his Boca Park cafe in 2010. Michael and Jennifer Cornthwaite in 2010 opened The Beat Coffeehouse downtown. Ynigues, also unemployed, took to the streets with Grouchy John’s last spring and plans to open a brick-and-mortar location in Jeanne Kessler’s former Saxby’s shop this month. Perk Up Coffee Shop owner Kessler shuttered her Saxby’s franchise and founded an independent Southern Highlands coffeehouse in October.

“There’s been a lot more buildings up for grabs, and because of that, the pricing has been a lot better,” Kessler said.

The Brazilian-born Oliveira had hoped to open Sambalatte in 2005, but when he approached Boca Park, he found leases were far out of his price range.

“There was not a good place for people to go and have a good coffee, a place that reminded me of places in Brazil or Europe where people can go and have coffee,” Oliveira said. “This idea was brewing, brewing, brewing, but at the time I couldn’t pull the trigger because commercial real estate was absolutely crazy in Las Vegas.”

After being laid off by a hotel in 2009, he again tried Boca Park. This time, he could afford the rent. But some 20 banks refused to finance Oliveira’s venture, so a friend agreed to be his financial partner.

Sambalatte opened with a slate of hard-to-find drinks (flat whites, Nutella cappuccinos) made with Brazilian beans from Colorado River Coffee Roasters. The Italian-style coffeehouse garnered raves from critics and Yelp reviewers, and Oliveira said six more coffee shops quickly followed his lead.

FIRST, YOU ROAST

Colorado River’s opening coincided with the birth of the latest wave of local coffeehouses.

Don Anderson worked on developing the roasting business for the last eight years, but didn’t officially get off the ground until 2009.

“It’s a tough business, very capital-intensive,” Anderson said, but the love of high-quality coffee pulls him through on days when he has to drop thousands of dollars on a backup generator or forklift.

It’s a family business. Erik roasts while other Andersons package orders and schlep beans to various clients.

Ninety percent of Colorado River’s business is wholesale, but retail orders are picking up. Customers can buy bags of beans at farmer’s markets, the Boulder City Albertsons, downtown Las Vegas grocery store Resnicks and, soon, at Whole Foods Markets.

A coffee roaster’s startup costs can range upwards of $200,000, when factoring in roasting equipment and product.

“For people who want to get into this business, it’s tough because costs are high,” Anderson said.

It’s also an intensely localized international industry.

Colorado River Coffee Roasters works with importers who travel to coffee-producing countries and find microlots, or small farms that produce minimal amounts of high-quality, specialty-grade beans. The importers test the coffee and send flavor descriptions to Anderson, who selects four or six farms from which he wants to buy.

Prices vary widely, depending on the export country. Jamaican beans are often prohibitively expensive for Anderson, who buys them only on request from a client. Colorado River stocks a supply of one or two months in Boulder City. Most beans are stored in San Francisco, Seattle and Houston because they’re happier in coastal humidity, Anderson said.

Roasters also must stay on their toes because the cost of coffee can fluctuate rapidly. Of every $1 Colorado River makes, 45 cents goes back into buying coffee. Then there’s packing, overhead and labor. If Anderson pays $3.13 per pound for a bag of coffee, and 21 percent is burned up in the smokestack when roasting, he has to factor that into the wholesale base price.

But clients don’t mind paying for specialty-grade coffee roasted locally, Anderson said. Business is growing steadily, with help from word-of-mouth and the Internet.

The roaster is at about 30 to 35 percent capacity with its current Diedrich machine. When it hits 65 percent, Anderson will buy a new machine four times larger than the Diedrich. Colorado River’s current machine can roast 7,000 pounds per month.

SKINNY LATTES, SKINNG PROFIT MARGINS

Coffeehouse profit margins are still slim, mainly due to the nature of coffee-drinking as an early morning pastime. Peak hours of operation tend to be early in the day, with sales in a limited time span.

Sunrise Coffee struggled to stay afloat during its first couple of years. Owner Romero said she was “bleeding,” and decided to supplement her revenue with vegan and vegetarian food, which has helped her stay in business.

“I started making these wraps, and at this point they’re actually competing and getting the lead on my coffee sales,” Romero said.

Oliveira said his Boca Park slot near Summerlin was carefully selected to bring in more revenue. Sambalatte is striving to be the Neiman Marcus of coffeehouses, he said, so a high-end location was essential.

Drive-thrus also help — or, as Jeanne Kessler puts it, they are a “necessary evil.”

“People have become so accustomed to having that drive-thru aspect to their morning,” she said.

Grouchy John’s will also have a drive-thru when it opens, which Ynigues agreed is essential.

“With the culture in Vegas being as transient as it is, with everyone always moving, a drive-thru helps,” he said. “We’re fighting the Starbucks mentality and they always have drive-thrus.”

But for many coffee shops, ambiance is just as important as what’s in the cup.

At The Beat, the Cornthwaites have fostered an atmosphere that’s blends an artists’ den with a “Cheers” philosophy. Soon after opening, the coffeehouse became a destination in its own right for locals who want a place to hang out downtown during daylight. At night, gallery- and bar-hoppers can grab a beer at The Beat before checking out the rest of Emergency Arts or moving on to other downtown watering holes.

“Cafes thrive when there’s culture,” said Brian “Paco” Alvarez, a Las Vegas native and curator for the Las Vegas News Bureau Archive. “As people begin to congregate downtown, they’re going to want more places like The Beat. We’re going to need a Beat 2, a Beat 3, a Beat 4.”

People are also looking to get away from the chain experience that dominates retail, Alvarez said.

“There was a moment in time when we saw Starbucks munching away on mom and pop stores, but people want a more authentic experience,” said Alvarez, who spent his formative years hanging out at Cafe Copioh and Cafe Espresso Roma.

There will always be the person who wants a grande, nonfat caramel Frappuccino with no whip every morning on the way to work and the person who wants to buy organic coffee on the way to the farmers market. Independent coffeehouses will likely garner the latter, but they are also trying to attract the people in the middle, who will visit a local shop if it’s conveniently located, or even drive across town for the right taste.

“That might be one thing that drives the shop local (movement), is if they have more options for quality stuff, then they’ll opt for that,” Ynigues said.

The success of small, out-of-the-way (unless you live in Henderson) breakfast spot Bread and Butter is proof of that, he added.

Whether Las Vegas will ever be the Seattle of the Southwest is up for debate, but with more emphasis on shopping and buying locally, Las Vegas residents may increasingly seek out more specialty coffee blends and the shops that sell them.

“The amount of education people do on their own, it makes the whole idea of latte art and specialty coffee … part of mainstream culture,” Sunrise Coffee owner Romero said. “Procuring something that might not be hard to find but was made with love and care — people want that.”

Contact reporter Caitlin McGarry at cmcgarry@reviewjournal.com or 702-387-5273.

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